SOPS & Guidelines for Condemnation

AIIMS RISHIKESH

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1.0 INTRODUCTION
Despite careful use and adequate maintenance, certain equipment/ non- consumables
items either becomes obsolete or beyond economic repair over a period of time.
Continuous use & various other factors including environmental factors cause
progressive wear and tear and render the item unserviceable. Such item needs to be
replaced to avoid interruption in services. however, prior to replacement, the equipment
needs to be condemned in an appropriate manner.
The process of condemnation can be subjected to scrutiny of various governmental
agencies as the procurement of items involves the utilization of public fund. Each citizen
has the right to seek clarification through, various platforms made available by the law.
There for, condemnation should be done only when there is an utmost necessity and
compliance with the rules should be given prime importance.
2.0 PURPOSE
To ensure the effective transparent and rule complaint condemnation and disposal of
hospital equipment tools and materials, that are recommended for condemnation,
according to the guidelines set in the GFR 2017.

3.0 SCOPE
This SOP applies to all assets of the institute including equipment non-consumable or
materials that are recommended for condemnation.

4.0 DEFINATIONS
4.1 Condemnation of equipment
It is a process of conducting an evaluation to determine whether the said non-
consumable item/ equipment should be removed from the service and sent for
disposal.
4.2 Replacement of equipment
Replacement of item/equipment may be required when the item is condemned,
non-separable of unfit for use. Depending upon item that is not functional, obsolete
or irreparable, the institute will weigh the asset life and usage of the item and
suggest replacement, if necessary.

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5.0 ABBREVATIONS
HOD - Head of Department

GFR — General Financial Rule

SOP – Standard Operating processor

6.0 RESPONSIBILITES
Responsibilities of various officers regarding the condemnation

6.1 Engineer of AIIMS /biomedical engineer/ Service Engineer from

company or firm.
 Inspect and certify the item and unserviceable, clinically obsolete, End of
life running cost high
 Opinion form external expert is mandatory for IT and Biomedical
equipment and machineries
 Certificate from external expert should be counter signed by engineer of
/Biomedical engineer/IT expert from the institute.
 AIIMS Engineer can certify items like furniture without opinion of external
expert.
6.2 Officer Incharge of Inventory
 Fill the fact sheet and obtain signature from the engineer of AIIMS
/biomedical engineer/ Service Engineer from company or firm, in
the fact sheet.
 Obtain the depreciated value/scrap value from the valuation
committee
 Enter the depreciated value/scrap value calculated by the valuation
committee in the condemnation form (Form GFR 10)
 Fill the fact sheet and condemnation form (Form GFR 10).
 Furnish the details of hazardous substance, if any
 Recommend items which does not required opinion of technical
expert for condemnation (Linen, Drums, vessels etc).
6.3 Head of the Department/ Nodal Officer / Officer Incharge of the
Unit or Office
 Counter sign the condemnation form (Form GFR 10) and other
documents
 Counter sign the fact sheet
 Obtain the depreciated value/scrap value from the valuation
committee

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  Enter the depreciated value/scrap value in the condemnation form
(Form GFR 10)
 Participate in condemnation committee meeting if necessary
 Furnish the details of hazardous substance, if any
 Make sure the fact sheet and condemnation form (Form GFR 10) is
completely filled.
 Recommend items which does not required opinion of technical
expert for condemnation (Linen, Drums, vessels etc).
6.4 Valuation Committee
The competent authority may, at his discretion, constitute a committee to
calculate the depreciated value/ scrap value of the items recommended
for condemnation. The committee must include the members from the
following disciplines.
 Biomedical Engineering cell
 Engineering/ Maintenance section
 Finance / account section
6.5 Condemnation committee
The competent authority may, at his discretion, constitute a committee at
appropriate level to declare item(s) as surplus or obsolete or
unserviceable.

Following Members may be included in the committee: -

Chairperson -------------------------HOD of any department

Member-------------------------------faculty from surgical disciplines

Member----------------------------faculty from hospital administration

Member ----------------------------- faculty incharge Infection control

Member-------------------------------Chief nursing officer

Member-------------------------------Superintendent engineer

Member ------------------------------ from Biomedical cell

Member ------------------------------ from IT cell

Member secretory ------------------Store officer

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 The chairman will conduct a meeting with all the members every six month and
scrutinize all the records of the equipment which are to be condemned,
considering the asset life of the equipment. Verify the depreciation value/scrap
value ascertained by the Head of the department. Physical verification can also be
carried out for the clarification. The recommendation for the condemnation along
with the minutes of meeting is sent to the medical superintendent for approval.
Disposal of item is done after the approval according to the guidelines given in GFR
2017.

6.6 Valuation committee

7.0 CONDEMNATION
7.1 Criteria for condemnation
Condemnation may be done on the basis of following criteria: -

 Unserviceable items
 Repair of item uneconomical: More than l0yrs old or repair cost is above 50%
of original value.
 Outdated technology/Obsolete: clinically or technically obsolete, or changes in
local policies for device use. Spares not available due to outdated model.
 Unsafe: does not comply with safety requirements defined by the
manufactures.
7.2 Process of condemnation

Each department carried out a biannual inspection of their asset for finding out
non-functional equipment, best efforts to be should be made to repair the
equipment.

The items which meet the criteria for condemnation and hamper the smooth
functioning of the unit by occupying the space should be identified. A list of such
items also is prepared

The officer incharge of the inventory fill the fact sheet and the condemnation
form (Form GFR 10) for each item which are to be condemned.

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The service engineer of the company or the firm/ engineer of AIIMS /
Biomedical engineer is asked to conduct a detailed inspection of the item and
enter the reason for condemnation in the fact sheet as well as put signature in
the space provided.

The fact sheet is counter signed by the HOD/Nodal officer / Officer

incharge of the section/ unit.

The valuation committee inspect the item and supporting documents as well as
calculate the depreciation/ residual value/ scrap value according to the
depreciation norm of GFR 2017. A Calculation sheet also should be prepared.

The list of item to be condemned along with dually filled fact sheets and
condemnation forms (Form GFR 10) of each item as well as the valuation by
valuation committee and all other supporting document are sent to the
condemnation committee, furnish the details of hazardous substance, if any,

The condemnation committee receives documents regarding the items

which are recommended for condemnation from various wards /departments
offices/ units

Chairman conducts a meeting with all the members and scrutinizes the
documents.

The condemnation committee will prepare a list and a detailed

condemnation report, which must contain name and unique ID of the items, date
of purchase and warranty expire purchase invoice and cost, technical
specification.

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This list along with all the supporting document is sent to the competent
authority for the approval of condemnation and disposal.

The approving authority might seek clerification of review the committee must
address them promptly.

The reason for condemnation is recorded by the store officer and the
item is kept in designated place (Junk Room).

Ensure the asset register/store book reflect the changes accurately mentioning
the date of disposal as well as mode of disposal and the condemnation items list
shall be attached at the back of stock register for verification.

Ongoing Annual Maintenance Contract / Comprehensive Maintenance

Contract, if any, such item/ equipment shall be terminated with the effective
date of condemnation.

The item is disposed depending on the conditioning of the item, it could be

auctioned donated recycled or disposed of or by any other means mentioned
GFR 2017 (following the guidelines). After getting approval from competent
authority.

All financial transaction related to condemnation should be documented

by the Store Officer.

Report is sent to the director for perusal and ratification.

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 A dedicated team should review condemnation process annually to ensure
compliance with GFR 2017.

Maintained detailed records of a minimum seven years as managed by local

regulations. This includes inspection, reports condemnations, reports auction
details, disposal methods and financial transaction.

8.0 Disposal of condemned items

8.1 An item may be declared surplus or obsolete or unserviceable if the same is
of no use to the institute. The reasons for declaring the item surplus or
obsolete or unserviceable should be recorded by the authority competent to
purchase the item.
8.2 The book value, guiding price and reserved price, which will be required
while disposing of the surplus goods, should also be worked out. In case
where it is not possible to work out the book value, the original purchase
price of the goods in question may be utilized. A report of stores for
disposal shall be prepared in form GFR- 10.
8.3 In case an item becomes unserviceable due to negligence, fraud or mischief
on the part of an employee, responsibility for the same should be fixed.
8.4 Sale of Hazardous waste/Scrap batteries/Electronic waste: Scrap lots
comprising of hazardous waste, batteries etc. Shall be sold keeping in view
the extant guidelines of Ministry of Environment & Forest. Prospective
bidders of such lots of hazardous waste/ scrap batteries / e-waste should
be in possession of registration, valid on the date of e-auction and on the
date of delivery, as recycler/ pre-processor agency.
8.5 Mode of disposal
(i) Surplus or obsolete or unserviceable goods of assessed residual
value above Rupees Two Lakh should be disposed of by:
a. Obtaining bids through advertised tender.
b. Public auction.

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 (ii) For surplus or obsolete or unserviceable items with residual value
less than Rupees Two Lakh, the mode of disposal will be determined
by the competent authority, keeping in view the necessity to avoid
accumulation of such goods and consequential blockage of space
and, also, deterioration in value of goods to be disposed of
ministries/ departments should, as far as possible prepare a list of
such goods.
(iii) Certain surplus or obsolete or unserviceable item such as expired
medicines, food grain, ammunition etc., which are hazardous or unfit
for human consumption, should be disposed of or destroyed
immediately by adopting suitable mode so as to avoid any health
hazard and/or environmental pollution and also the possibility of
misuse of such items.
(iv) Surplus or obsolete or unserviceable item, equipment and
documents, which involve security concerns (e.g. currency,
negotiable instruments, receipt books, stamps, security press etc.)
should be disposed of/ destroyed in an appropriate manner to
ensure compliance with rules relating to official secrets as well as
financial prudence.
(v) Disposal through Advertised Tender

The broad steps to be adopted for this purpose are as follows:

a. Preparation of bidding documents.

b. Invitation of tender for the surplus goods to be sold.
c. Opening of bids.
d. Analysis and evaluation of bids received.
e. Selection of highest responsive bidder.
f. Collection of sale value from the selected bidder.
g. Issue of sale release order to the selected bidder.
h. Release of the sold surplus goods to the selected bidder.
i. Return of bid security to the unsuccessful bidders.

The important aspects to be kept in view while disposing the goods through
advertised tender are as under: -

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 a. The basic principle for sale of Such goods through advertised tender is
ensuring transparency, competition, fairness and elimination of
discretion. Wide publicity should be ensured of the sale plan and the
goods to be sold. All the required terms and conditions of sale are to be
incorporated in the bidding document comprehensively in plain and
simple language. Applicability of taxes, as relevant, should be clearly
stated in the document.
b. The bidding document should also indicate the location and present
condition of the goods to be sold so that the bidders can inspect the
goods before bidding.
c. The bidders should be asked to furnish bid security along with their
bids. The amount of bid security should ordinarily be ten per cent. of
the assessed or reserved price of the goods. The exact bid security
amount should be indicated in the bidding document.
d. The bid of the highest acceptable responsive bidder should normally be
accepted. However, if the price offered by that bidder is not acceptable,
negotiation may be held only with that bidder. In case such negotiation
does not provide the desired result, the reasonable or acceptable price
may be counter offered to the next highest responsive bidder (s).
e. In case the total quantity to be disposed of cannot be taken up by the
highest acceptable bidder, the remaining quantity may be offered to
then ext higher bidder(s) at the price offered by the highest acceptable
bidder.
f. Full payment, i.e. the residual amount after adjusting the bid security
should be obtained from the successful bidder before releasing the
goods.
g. In case the selected bidder does not show interest in lifting the goods,
the bid security should be forfeited and other actions initiated including
re-sale of the goods in question at the risk and cost of the defaulter,
after obtaining legal advice.
h. Late bids i.e. bids received after the specified date and time of receipt
should not to be considered.
(vi) Disposal through Auction.

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 a. Institute may undertake auction of goods to be disposed of either
directly or through approved auctioneers.
b. The basic principles to be followed here are similar to those applicable
for disposal through advertised tender so as to ensure transparency,
competition, fairness and elimination of discretion. The auction plan
including details of the goods to be auctioned and their location,
applicable terms and conditions of the sale etc. should be given wide
publicity in the same manner as is done in case of advertised tender.
c. While starting the auction process, the condition and location of the
goods to be auctioned, applicable terms and conditions of sale etc., (as
already indicated earlier while giving vide publicity for the same),
should be announced again for the benefit of the assembled bidders.
d. During the auction process, acceptance or rejection of a bid should be
announced immediately on the stroke of the hammer. If a bid is
accepted, earnest money (not less than twenty-five per cent. of the bid
value) should immediately be taken on the spot from the successful
bidder either in cash or in the form of deposit-at-Call-Receipt (DACR),
drawn in favour of the Ministry or Department selling the goods. The
goods should be handed over to the successful bidder only after
receiving the balance payment.
e. The auction will be conducted by the condemnation committee after
getting approval from the competent authority. The team should
however include an officer of the Finance division.
(vii) Disposal at scrap value or by other modes:
a. If the institute is unable to sell any surplus or obsolete or
unserviceable item in spite of its attempts through advertised tender or
auction, it may dispose of the same at its scrap value with the approval
of the competent authority in consultation with Finance division. In
case the Institute is unable to sell the item even at its scrap value, it may
adopt any other mode of disposal including destruction of the item in an
eco-friendly manner.
b. A sale account should be prepared for goods disposed of in Form GFR
11 duly signed by the store officer.
(viii) Powers to write off:

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 a. All profits and losses due to revaluation, stock-taking or other causes
shall be duly recorded and adjusted where necessary. Formal
sanction of the competent authority shall be obtained in respect of
losses, even though no formal correction or adjustment in
government accounts is involved.
b. Powers to write off of losses are available under the Delegation of
Financial Powers rules.

(ix) Losses due to depreciation:

Losses due to depreciation shall be analysed, and recorded under

following heads, as applicable: -

a. Normal fluctuation of market prices;

b. Normal wear and tear;
c. Lack of foresight in regulating purchases; and
d. Negligence after purchase.
(x) Losses not due to depreciation:

Losses not due to depreciation shall be grouped under the following

heads: -

a. losses due to theft or fraud;

b. losses due to neglect
c. anticipated losses on account of obsolescence of stores or of purchases
in excess of requirements;
d. losses due to damage;
e. losses due to extra ordinary situations under ‘Force Majeure’
conditions like fire, flood, enemy action, etc.;

9.0 Review of SOP

Use feedback of audits to refined and improve SOP. Review the SOP
annually and whenever there are significant changes in GFR or Hospital protocols to
ensure its relevance and accuracy.

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10.0 APPFNDITY AND FORMS
 Annexure A: Condemnation Form (Based on GFR 10)
 Annexure B: Factsheet condemnation
 Annexure C: GFR 11

11.0 REFERENCE
 GFR 2017
 Condemnation Policy Vardhman mahavir Medical College & Safdarjung
Hospital

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 अखिल भारतीय आयुर्विज्ञान संस्थान ऋषिके श
All India Institute of Medical Sciences, Rishikesh

Letter no. Date:-

Part A: To be filled only by Head/Nodal Officer/Office In-charge of the Department
Serial No (to be assigned by the condemnation Committee): …………………………...
Equipment/Goods/furniture Condemnation Code (For Office use by ICC Only) :……………………
Factsheet of the Equipment/Goods/Furniture Recommended for Condemnation by
Head/Nodal Officer
(Note :Include documentary evidence, in support of the data)
Name of the Department :
Name of the Equipment/Goods/Furniture :
Site/Place of Installation /lying of Goods/Furniture :
Current Location :
Function of the Equipment/Type of Goods/furniture:
SI. No. Details of the equipment/ goods/furniture
1 Make
2 Model No.
3 Supply Order No.
4 Serial No.
5 Manufacture / Supplier
6 Indian Agent(If applicable)
7 Purchase Cost (in INR)
8 Date of Purchase
9 Date of Installation/Date of supply
10 Warranty Expired on/CMC Clause
11 Non Functional/out of use since when ?
Source of Funding (encircle whichever is
12
applicable)/Purchasing mode
Expected Functional Life as laid down by
13 the manufacturer/CMC clause/Buy’ Back
offer
External Expert’s Recommendation, if
14 applicable{for Equipment External expert's
comment mandatory)
Residual or Depreciated value of the equipment
15
(enclose calculation sheet by valid engineer)
Is the equipment proposed to be
16 condemned under buy back, if yes give
details

17 Does the equipment have any biohazards, if

so, necessary permission from appropriate
authorities to be enclosed
Repairing/maintenance request produced
18
or not
Stock Book entry Done (encircle)
19
If Yes :Central Store Ledger Entry No
REASON (S) BEHIND RECOMMENDING FOR CONDEMNATION (Please tick mark all that
apply)
• 10 Years old or repair cost is above 50% of original value. 14 | P a g e
•Inability to get spares
20
• Clinically obsolete
(Signature of technical expert/service (Signature of Biomedical/Concerned
Engineer from the company/firm with AIIMS Engineer with stamp) if applicable
stamp) if applicable

(Signature of the officer incharge of the (Signature of HOD/Nodal Officer/ Officer

inventory with stamp) incharge of the office or unit with stamp)

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